<PAGE> 1
Registration No. 333-______
- --------------------------------------------------------------------------------
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1999.
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
ONEOK, Inc. Long-Term Incentive Plan
------------------
ONEOK, INC.
100 West Fifth Street, Tulsa, Oklahoma 74103
(Name of the issuer of the equity securities being offered pursuant
to the Plan and the address of its principal office)
OKLAHOMA 73-1520922
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
JIM KNEALE DONALD A. KIHLE
Vice President, Chief Financial Gable & Gotwals
Officer and Treasurer 100 West Fifth Street
ONEOK, Inc. Suite 1000
100 West Fifth Street Tulsa, Oklahoma 74103
Tulsa, Oklahoma 74103 (918) 585-8141
(918) 588-7000
(Name, addresses, and telephone numbers of agents for service)
------------------
Appropriate date of commencement of proposed sale pursuant to the Plan: from
time to time after the effective date hereof
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Offering Registration
to be Registered Registered(1) Per Unit(2) Price(3) Fee
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock,
$0.01 par value 1,445,200 $ 29.96875 $ 43,310,837 $ 12,040
- --------------------------------------------------------------------------------------------------------------
</TABLE>
Exhibits Index on Page 5.
<PAGE> 2
(1) Represents the estimated maximum amount of common stock of ONEOK, Inc.
(hereinafter referred to as "Common Stock") which could be acquired
under the ONEOK, Inc. Long-Term Incentive Plan (hereinafter referred to
as the "Plan") either directly from ONEOK, Inc. (hereinafter referred
to as the "Company"), or from purchases in the open market during the
years of operation of the Plan.
(2) Based on price of $ 29.96875 per share of the Common Stock, the average
sales price of the Common Stock published in the Wall Street Journal
reports of the New York Stock Exchange Composite Transaction for June
14, 1999.
(3) Estimated pursuant to Rule 457(c) solely for the purpose of calculating
the registration fee.
2
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 will
be sent or given to employees as specified in Rule 428(b)(1). These documents
(and the documents incorporated by reference pursuant to Item 3 of Part II of
this Registration Statement) taken together, constitute the prospectus for
purpose of Section 10(a) of the Securities Act of 1933, as amended.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3
INCORPORATION OF DOCUMENTS BY REFERENCE
The "Company", and the Plan hereby incorporate by reference in this Registration
Statement the following documents of the Company (SEC File No. 1-2572)
heretofore filed with the Securities and Exchange Commission:
(1) Annual Report on Form 10-K of ONEOK, Inc. for the year ended
August 31, 1998.
(2) All other reports filed by ONEOK or the Plan pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
since August 31, 1998. Form 8-K filed September 24, 1998. Form
8-K/A filed October 2, 1999. Form 8-K filed October 21, 1998.
Form 8-K filed December 16, 1998. Form 8-K filed December 16,
1998. Form 10-Q filed January 13, 1999. Form 8-K filed January
25, 1999. Form 8-K/A filed January 26, 1999. Form 8-K filed
January 25, 1999. Form 8-K filed February 8, 1999. Form 8-K
filed February 16, 1999. Form 8-K filed February 23, 1999.
Form 8-K filed February 24, 1999. Form 8-K filed February 24,
1999. Form 8-K filed February 26, 1999. Form 8-K filed March
5, 1999. Form 8-K filed March 19, 1999. Form 10-Q filed April
14, 1999. Form 8-K filed April 15, 1999. Form 8-K/A filed
April 29, 1999. Form 8-K filed April 19, 1999. Form 8-K filed
April 22, 1999. Form 8-K filed April 26, 1999. Form 8-K filed
May 3, 1999. Form 8-K filed May 13, 1999.
(3) ONEOK's Proxy Statement dated December 16, 1998 in connection
with its Annual Meeting of Shareholders held January 21, 1999.
(4) In addition, there is incorporated herein by reference all
documents filed subsequent to the date hereof, by the Company
and the Plan pursuant to Sections 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post-effective amendment which indicates that
all securities have been sold or which deregisters all
securities then remaining unsold. Such documents are deemed to
be a part hereof from the date of filing of such documents.
ITEM 4
DESCRIPTION OF SECURITIES
The following is a description of the Company's Common Stock offered.
The holders of the Company's Common Stock are entitled to receive such dividends
as may be declared by the Board of Directors out of funds legally available
therefor. Each outstanding share of Common Stock is entitled to full voting
rights for the election of directors and for all other purposes with one vote
for each share of Common Stock. In the event of any liquidation, dissolution, or
winding up of the Company, or any reduction of its capital resulting in any
distribution of its assets to its stockholders, The holders of Common Stock
shall be entitled to receive, pro rata, all the remaining assets of the Company
available for distribution to its stockholders. Each share
3
<PAGE> 4
of Common Stock includes an associated right, each right ("Right") entitling the
holder to purchase one one-hundredth of a share of Series C Participating
Preferred Stock, par value $0.01 per share of the Company pursuant to a Rights
Agreement between the Company and a designated rights agent (the "Rights
Agreement"). The designation of Rights (Exhibit 4(c) hereto) is incorporated
herein by reference.
ITEM 5
INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the securities which may be purchased under the Plan has been
passed upon by the firm of Gable & Gotwals, 100 West Fifth Street, Suite 1000,
Tulsa, Oklahoma 74103, counsel for the Company. The firm of Gable & Gotwals, has
reviewed the statements made as to matters of law and legal conclusions under
"Securities to be Offered" and such statements are set forth in the documents
which form a part of the prospectus in reliance upon its authority as an expert.
ITEM 6
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Article VIII of the bylaws of ONEOK, Inc. upon authorization and
determination either (1) by the board of directors by a majority of a quorum is
not consisting of directors who were not parties to the action, suit, or
proceeding involved; (2) if such a quorum is not obtainable, or even if
obtainable and a quorum of disinterested directors so directs, by independent
counsel in a written opinion; or (3) by the stockholders, the Company is
obligated to indemnify any person who incurs liability by reason of the fact
that he is or was a director, officer, employee, or agent of the Company, or is
or was serving at its request as a director , officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise, or
as a member of any committee or similar body, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. However, in an action by
or in the right of the Company, no indemnification will be made if such person
shall be adjudged to be liable to the Company, unless such indemnification is
allowed by a court of competent jurisdiction.
Under insurance obtained by the Company, coverage of Company officers and
directors against liability for neglect, errors, omission, or breaches of duty
in their capacities as such is provided for both the Company, to the extent that
it is obligated to indemnify such officers and directors, and the officers and
directors themselves. Such coverage is provided in the amount of $75,000,000
with a retained limit by the Company of $250,000. The insurance companies are
obligated to pay covered losses in excess of the $250,000 retained limit, up to
the policies' limits of $75,000,000. Among the policies' exclusions are those
which exclude coverage for accounting for profits made within the meaning of
Section 16(b) of the Securities Act of 1934, claims based upon or attributable
to directors and officers gaining any personal profit or advantage to which such
individuals are not legally entitled, and for any claims brought about or
attributable to the dishonesty of an officer or director.
The registrant has been advised that, in the opinion of the Securities and
Exchange Commission, provisions providing for the indemnification by the
corporation of its officers, directors, and controlling persons against
liabilities imposed by the Securities Act of 1933 are against public policy as
expressed in said Act and are therefore unenforceable. It is recognized that the
above-summarized provisions of the registrant's bylaws and the applicable
Oklahoma General Corporation Law may be sufficiently broad to indemnify
officers, directors, and controlling persons of the registrant against
liabilities arising under said Act. Therefore, in the event that a claim of
indemnification against liability under said Act (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) shall be asserted by an officer, director, or controlling person
under said provisions, the registrant will, unless in the opinion of its counsel
the question has already been settled by the controlling precedent, submit to a
court of appropriate jurisdiction the question of whether or not such
indemnification by it is against public policy as expressed in said Act and will
be governed by the final adjudication of such issue.
4
<PAGE> 5
ITEM 8
EXHIBITS
The following exhibits are attached hereto or incorporated by reference herein:
<TABLE>
<CAPTION>
Page Number or
Incorporation by
Reference to
-----------------
<S> <C>
(4)(a) Article "Fourth" of the Certificate of Incorporation Incorporated by reference
of ONEOK, Inc. (Preferred Stock and Common Stock) from Exhibit 3.1 to
Amendment No. 3 to Registration
Statement on Form S-4 filed
August 31, 1997
(4)(b) Certificate of Designation for Convertible Preferred Incorporated by reference
stock of WAI, Inc. (Now ONEOK, Inc.) filed November 26, 1997 from Exhibit 3.3 to
Amendment No. 3 to Registration
Statement on Form S-4 filed
August 31, 1997
(4)(c) Certificate of Designation for Series C Participating Incorporated by reference
Preferred Stock of ONEOK, Inc., filed November 26, 1998 from Exhibit No. 1 to
Form 8-A, filed November 26,
1997
(5) Opinion of Gable & Gotwals, Inc. 11
(23)(a) Consent of Gable & Gotwals, Inc.
(See Item 5)
(23)(b) Consent of KPMG LLP 13
(24) Powers of Attorney (Included on pages 8 and 9)
(99) ONEOK, Inc. Long-Term Incentive Plan 14
</TABLE>
5
<PAGE> 6
ITEM 9
UNDERTAKINGS
a. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(a) To include any prospectus required by Section 10
(a)(3) of the Securities Act of 1933;
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(c) To include any material information with respect to
the Plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at the time of shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
b. The undersigned registrant hereby undertakes that, for purpose of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
c. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus to each employee to whom the prospectus
is sent or given, the latest Annual Report to Shareholders unless such
employee otherwise has received a copy of such report, in which case
the registrant shall state in the prospectus that it will promptly
furnish, without charge, a copy of such report on written request of
the employee. If the last fiscal year of the registrant has ended
within 120 days prior to the use of the prospectus, the Annual Report
of the registrant of the preceding fiscal year may be delivered, but
within such 120-day period the Annual Report for the last fiscal year
will be furnished to each such employee.
The undersigned registrant hereby undertakes to transmit or cause to be
transmitted to all employees participating in the Plan who do not
otherwise receive such material as stockholders or the registrant, at
the time and in the manner such material is sent to its stockholders,
copies of all reports, proxy statements, and other communications
distributed to its stockholders generally.
d. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In
6
<PAGE> 7
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
7
<PAGE> 8
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Tulsa and the State of Oklahoma, on the 17th day of
June, 1999.
ONEOK, Inc.
By: Larry Brummett
---------------------------------
Larry Brummett, Chairman of the
Board and Chief Executive
Officer
8
<PAGE> 9
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes Larry
Brummett and Jim Kneale, or either of them, as attorney-in-fact with full power
of substitution, to execute in the name and on behalf of each person,
individually and in each capacity stated below, and to file any and all
amendments to this registration statement, including any and all post-effective
amendments and all instruments necessary or incidental in connection therewith.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
certify that to the best of their knowledge and belief, the registrant meets all
the requirements for filing on Form S-8. This registration statement has been
signed below by the following persons in the capacities indicated in the City of
Tulsa and the State of Oklahoma, on this 17th day of June, 1999.
Larry W. Brummett Jim Kneale
- ------------------------------- ---------------------------------
Larry W. Brummett Jim Kneale
Chairman of the Board, Vice President,
Chief Executive Chief Financial Officer, and
Officer, and Director Treasurer
David L. Kyle Barry D. Epperson
- ------------------------------- ---------------------------------
David L. Kyle Barry D. Epperson
President, Chief Operating Vice President, Controller, and
Officer, and Director Chief Accounting Officer
Edwyna G. Anderson Douglas T. Lake
- ------------------------------- ---------------------------------
Edwyna G. Anderson Douglas T. Lake
Director Director
William M. Bell Bert H. Mackie
- ------------------------------- ---------------------------------
William M. Bell Bert H. Mackie
Director Director
Douglas R. Cummings
- ------------------------------- ---------------------------------
Douglas R. Cummings Douglas Ann Newsom
Director Director
William L. Ford Gary D. Parker
- ------------------------------- ---------------------------------
William L. Ford Gary D. Parker
Director Director
Howard R. Fricke
- ------------------------------- ---------------------------------
Howard R. Fricke J. D. Scott
Director Director
Stanton L. Young
---------------------------------
Stanton L. Young
Director
9
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE NUMBER OR
EXHIBIT INCORPORATION BY
NUMBER DESCRIPTION REFERENCE TO
- ------- ----------- ----------------
<S> <C> <C>
(4)(a) Article "Fourth" of the Certificate of Incorporation Incorporated by reference
of ONEOK, Inc. (Preferred Stock and Common Stock) from Exhibit 3.1 to
Amendment No. 3 to
Registration Statement on
Form S-4 filed August 31,
1997
(4)(b) Certificate of Designation for Convertible Preferred Incorporated by reference
stock of WAI, Inc. (Now ONEOK, Inc.) filed November 26, 1997 from Exhibit 3.3 to
Amendment No. 3 to
Registration Statement on
Form S-4 filed August 31,
1997
(4)(c) Certificate of Designation for Series C Participating Incorporated by reference
Preferred Stock of ONEOK, Inc., filed November 26, 1998 from Exhibit No. 1 to
Form 8-A, filed November
26, 1997
(5) Opinion of Gable & Gotwals 11
(23)(a) Consent of Gable & Gotwals (See Item 5)
(23)(b) Consent of KPMG LLP 13
(24) Powers of Attorney (Included on pages 8 and 9)
(99) ONEOK, Inc. Long-Term Incentive Plan 14
</TABLE>
10
<PAGE> 1
[GABLE & GOTWALS LETTERHEAD]
June 17, 1999
ONEOK, Inc.
100 West Fifth Street
Tulsa, OK 74103
Re: S-8 Registration Statement Under the Securi-
ties Act of 1933, Relating to the Shares of
Common Stock of ONEOK, Inc. in Relation
to the ONEOK, Inc. Long-Term Incentive Plan
Gentlemen:
We understand that ONEOK, Inc., an Oklahoma corporation (hereinafter
referred to as the "Company"), will file with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, a Form S-8 Registration
Statement relating to the registration of shares of the Company's Common Stock
with respect to the ONEOK, Inc. Long-Term Incentive Plan (the "Plan").
We have examined (a) the above-mentioned Registration Statement which
will be filed with the Securities and Exchange Commission; (b) the Certificate
of Incorporation and Bylaws of the Company, as amended; (c) the ONEOK, Inc.
Long-Term Incentive Plan and the corporate actions taken by the Board of
Directors in connection with the Registration Statement and related matters; and
(d) such other corporate records, certificates of public officials and officers
of the Company and other documents as we have considered relevant to the matters
covered by this opinion.
In connection with the foregoing, as counsel for the Company, we wish
to advise you as follows:
11
<PAGE> 2
1. The Company is a corporation validly organized and existing under
the laws of the State of Oklahoma and is duly qualified to do business as a
corporation in the State of Kansas.
2. The filing of the above-mentioned Registration Statement has been
duly authorized by the proper corporate action on the part of the Company.
3. Assuming the Shares are being issued in compliance with the terms
and conditions of the Plan, when the certificates for the Shares have been
executed by the proper officer of the Company, countersigned by the Transfer
Agent and registered by the Registrar thereof, the certificates for such Shares
will represent, and the Shares will constitute, duly authorized, legally issued,
fully paid, non-assessable, valid and legal shares of the Common Stock of the
Company.
We hereby consent to:
1. Being named in the Form S-8 Registration Statement and documents
constituting the prospectus which is being furnished, and in any amendments
thereto, as counsel for the Company, passing on legal matters in connection with
the issuance of the Common Stock to the Trustee under the Plan;
2. The making in the Form S-8 Registration Statement and documents
constituting the prospectus, and in any amendments thereto, of the statements
now appearing therein under the caption "interests of Named Experts and
Counsel," insofar as they are applicable to us; and
3. The filing of this opinion as an exhibit to the above-mentioned Form
S-8 Registration Statement.
Very truly yours,
GABLE & GOTWALS
By Donald A. Kihle
---------------------
Donald A. Kihle
12
<PAGE> 1
EXHIBIT (23)(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
ONEOK, Inc.
We consent to the incorporation by reference herein of our report on
the Consolidated Financial Statements of ONEOK, Inc. as of August 31, 1998 and
1997, and for each of the years in the three-year period ended August 31, 1998,
which report appears in the August 31, 1998, Annual Report on Form 10-K of
ONEOK, Inc.
KPMG LLP
Tulsa, Oklahoma
June 17, 1999
13
<PAGE> 1
EXHIBIT 99
ONEOK, INC.
LONG-TERM INCENTIVE PLAN
1. PURPOSES.
The purposes of this Plan are (a) to provide competitive incentives that
will enable the Company to attract, retain, motivate, and reward Key
Employees and Non-Employee Directors of the Company, and (b) to give the
Company's Key Employees and Non-Employee Directors an interest parallel to
the interests of the Company's shareholders generally.
2. DEFINITIONS.
Unless otherwise required by the context, the following terms, when used
in this Plan, shall have the meanings set forth in this Section 2.
(a) "Beneficiary" means a person or entity (including a trust or
estate), designated in writing by a Participant on such forms and
in accordance with such terms and conditions as the Committee may
prescribe, to whom the Participant's rights under the Plan shall
pass in the event of the death of the Participant.
(b) "Board" or "Board of Directors" means the Board of Directors of
the Company, as constituted from time to time.
(c) "Change in Control" means any of the following:
(i) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Company, a
Subsidiary, an employee benefit plan of the Company or a
Subsidiary, or any person acting on behalf of the Company or
a Subsidiary in a distribution of stock to the public,
becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of
the Company representing more than fifteen percent of the
combined voting power of the Company's then outstanding
securities;
(ii) shareholders of the Company approve (A) an agreement for the
sale or disposition of all or substantially all of the
Company's assets to an entity which is not a Subsidiary or
owned by shareholders of the Company in substantially the
same proportions as their ownership of Common Stock, (B) a
plan of complete liquidation, or (C) a consolidation or
merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which
shares of Common Stock would be converted into cash,
securities or other
14
<PAGE> 2
property, other than a merger in which the holders of Common
Stock immediately prior to the merger will have
substantially the same proportionate ownership of common
stock of the surviving corporation immediately after the
merger; or
(iii) the persons who were members of the Board of Directors
immediately before a tender or exchange offer by any person
other than the Company or a Subsidiary, or before a merger,
consolidation, or contested election, or before any
combination of such transactions, cease to constitute a
majority of the Board of Directors as a result of such
transaction or transactions.
(d) "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time. References to a particular section of
the Code shall include references to any related Treasury
Regulations and to successor provisions.
(e) "Committee" means the Committee appointed by the Board of
Directors to administer the Plan pursuant to the provisions of
section 11(a) below.
(f) "Common Stock" means common stock, $.01 par value, of the Company.
(g) "Company" means ONEOK, Inc., an Oklahoma corporation its
successors and assigns.
(h) "Director Fees" means all compensation and fees paid to a
Non-Employee Director by the Company for his services as a member
of the Board of Directors.
(i) "Director Stock Award" means an award of ONEOK, Inc. Common Stock
granted to a Non-Employee Director.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(k) "Fair Market Value" on a particular date means the average of the
high and low sale prices of a share of Common Stock in
consolidated trading on the date in question as reported by The
Wall Street Journal or another reputable source designated by the
Committee; provided that if there were no sales on such date
reported as provided above, the respective prices on the most
recent prior day for which a sale was so reported. In the case of
an Incentive Stock Option, if the foregoing method of determining
Fair Market Value should be inconsistent with section 422 of the
Code, "Fair Market Value" shall be determined by the Committee in
a manner consistent with such section of the Code and shall mean
the value as so determined.
(l) "General Counsel" means the General Counsel of the Company serving
from time to time.
15
<PAGE> 3
(m) "Incentive Stock Option" means an option, including an Option as
the context may require, intended to qualify for the tax treatment
applicable to incentive stock options under section 422 of the
Code.
(n) "Key Employee" means an employee of the Company or a Subsidiary,
including an officer or director who is such an employee, who the
Committee determines is in a position to contribute significantly
to the growth and profitability of, or to perform services of
major importance to, the Company and its Subsidiaries.
(o) "Non-Employee Director" means a member of the Board of Directors
of the Company who is not an employee of the Company, and who
qualifies as a "Non-Employee Director" under the definition of
that term in SEC Rule 16b-3.
(p) "Non-Statutory Stock Option" means an option, including an Option
as the context may require, which is not intended to qualify for
the tax treatment applicable to incentive stock options under
section 422 of the Code.
(q) "Option" means an option granted under this Plan to purchase
shares of Common Stock. Options may be Incentive Stock Options or
Non-Statutory Stock Options.
(r) "Participant" means a Key Employee or Non-Employee Director who
has been granted a Stock Incentive.
(s) "Performance Unit Award" means an amount of cash or shares of
Common Stock or a combination of each, that will be distributed in
the future if continued employment and/or other performance
objectives or contingencies specified by the Committee are
attained. Such other performance objectives may include, without
limitation, corporate, divisional or business unit financial or
operating performance measures and such other contingencies may
include the Participant's depositing with the Company, acquiring
or retaining for stipulation time periods specified amounts of
Common Stock. The amount of the award may but need not be
determined by reference to the market value of Common Stock.
(t) "Plan" means the ONEOK, Inc. Long-Term Incentive Plan set forth in
these pages, as amended from time to time.
(u) "Plan Year" means the calendar year beginning on January 1 and
ending the next December 31.
(v) "Restricted Stock Award" means shares of Common Stock which are
issued or transferred to a Participant under Section 5 below and
which will become free of restrictions specified by the Committee
if continued employment and/or other performance objectives or
contingencies specified by the Committee are attained. Such
16
<PAGE> 4
other performance objectives may include, without limitation,
corporate, divisional or business unit financial or operating
performance measures and such other contingencies may include the
Participant's depositing with the Company, acquiring or retaining
for stipulated time periods specified amounts of Common Stock.
(w) "SEC Rule 16b-3" means Rule 16b-3 of the Securities and Exchange
Commission promulgated under the Exchange Act, as such rule or any
successor rule may be in effect from time to time.
(x) "Section 16 Person" means a person subject to Section 16(b) of the
Exchange Act with respect to transactions involving equity
securities of the Company.
(y) "Stock Bonus Award" means an amount of cash or shares of Common
Stock which is distributed to a Participant or which the Committee
agrees to distribute in the future to a Participant in lieu of, or
as a supplement to, any other compensation that may have been
earned by services rendered prior to the date the distribution is
made. The amount of the award may but need not be determined by
reference to the market value of Common Stock. Performance Unit
Awards and Restricted Stock Awards are specific types of Stock
Bonus Awards.
(z) "Stock Incentive" means an award granted under this Plan in one of
the forms provided for in Section 3.
(aa) "Subsidiary" means a corporation or other form of business
association of which shares (or other ownership interest) having
more than 50 percent of the voting power are or in the future
become owned or controlled, directly or indirectly, by the
Company; provided, however, that in the case of an Incentive Stock
Option, the term "Subsidiary" shall mean a Subsidiary (as defined
by the preceding clause) which is also a "subsidiary corporation"
as defined in Section 424(f) of the Code.
3. GRANTS OF STOCK INCENTIVES.
(a) Subject to the provisions of the Plan, the Committee may at any
time, or from time to time, grant Key Employees Stock Bonus
Awards, which may but need not be Performance Unit Awards or
Restricted Stock Awards, and/or Options, which may be Incentive
Stock Options or Non-Statutory Stock Options.
(b) Subject to the provisions of the Plan, the Committee shall grant
Director Stock Awards to Non-Employee Directors in accordance with
Section 7 of the Plan. Notwithstanding anything else otherwise
expressed or implied in the Plan, no other form of Stock Incentive
shall be granted to Non-Employee Directors under the Plan, and in
no event shall any grant of an Incentive Stock Option be made to a
Non-Employee Director.
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<PAGE> 5
(c) After a Stock Incentive has been granted,
(i) the Committee may waive any term or condition thereof that
could have been excluded from such Stock Incentive when it
was granted, and
(ii) with the written consent of the affected Participant, may
amend any Stock Incentive after it has been granted to
include (or exclude) any provision which could have been
included in (or excluded from) such Stock Incentive when it
was granted, and no additional consideration need be
received by the Company in exchange for such waiver or
amendment.
4. STOCK SUBJECT TO THE PLAN.
(a) The maximum number of shares of Common Stock which was authorized
to be issued or transferred pursuant to Stock Incentives to be
granted under the Plan upon the Plan's initial adoption on August
17, 1995, was 1,000,000 shares of Common Stock ("Initially
Authorized Shares"), of which 554,800 shares remain available for
grant as of August 20, 1998; and the Board has authorized that the
amount of those shares remaining eligible to be granted on the
effective date of the Plan, as amended and restated, be carried
over and continued to be reserved, together with reservation of an
additional number of shares necessary to have a total of 2,000,000
shares of Common Stock which may be issued or transferred pursuant
to Stock Incentives granted under the Plan on and after the date
of such amendment and restatement of the Plan, subject to the
provisions below of paragraph 4(c) and of Section 9; provided,
that the maximum number of shares of Common Stock with respect to
which Options or other Stock Incentives may be granted or issued
to any employee under the Plan during any year is 150,000.
(b) Such shares may be authorized but unissued shares of Common Stock,
shares of Common Stock held in treasury, whether acquired by the
Company specifically for use under this Plan or otherwise, or
shares issued or transferred to, or otherwise acquired by, a trust
pursuant to paragraph 12(d) below, as the Committee may from time
to time determine, provided, however, that any shares acquired or
held by the Company for the purposes of this Plan shall, unless
and until issued or transferred to a trust pursuant to paragraph
12(d) below or to a Participant in accordance with the terms and
conditions of a Stock Incentive, be and at all times remain
authorized but unissued shares or treasury shares (as the case may
be), irrespective of whether such shares are entered in a special
account for purposes of this Plan, and shall be available for any
corporate purpose.
(c) If any shares of Common Stock subject to a Stock Incentive shall
not be issued or transferred to a Participant and shall cease to
be issuable or transferable to a Participant because of the
termination, expiration or cancellation, in whole or in part,
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<PAGE> 6
of such Stock Incentive or for any other reason, or if any such
shares shall, after issuance or transfer, be reacquired by the
Company because of the Participant's failure to comply with the
terms and conditions of a Stock Incentive or for any other reason,
the shares not so issued or transferred, or the shares so
reacquired by the Company, as the case may be, shall no longer be
charged against the limitations provided for in paragraph (a)
above of this Section 4 and may again be made subject to Stock
Incentives; provided that the number of shares not so issued or
transferred and any such reacquired shares may again be made
subject to Stock Incentives for Section 16 Persons only if the
General Counsel determines that doing so would not jeopardize any
exemption from Section 16 of the Exchange Act (including without
limitation SEC Rule 16b-3) for which the Company intends Section
16 Persons to qualify. If a Participant pays the purchase price of
shares subject to an Option by surrendering shares of Common Stock
in accordance with the provisions of paragraph 6(b)(iv) below, the
number of shares surrendered shall be added back to the number of
shares available for issuance or transfer under the Plan so that
the maximum number of shares that may be issued or transferred
under the Plan pursuant to paragraph 4(a) above shall have been
charged only for the net number of shares issued or transferred
pursuant to the Option exercise.
5. STOCK BONUS AWARDS, PERFORMANCE UNIT AWARDS AND RESTRICTED STOCK AWARDS.
Stock Bonus Awards, Performance Unit Awards and Restricted Stock Awards
shall be subject to the following provisions:
(a) A Key Employee may be granted a Stock Bonus Award, Performance
Unit Award or Restricted Stock Award, and a Non-Employee Director
may be granted a Director Stock Award, whether or not he or she is
eligible to receive similar or dissimilar incentive compensation
under any other plan or arrangement of the Company.
(b) Shares of Common Stock subject to a Stock Bonus Award may be
issued or transferred to a Participant at the time such Award is
granted, or at any time subsequent thereto, or in installments
from time to time, and subject to such terms and conditions, as
the Committee shall determine. In the event that any such issuance
or transfer shall not be made to the Participant at the time such
Award is granted, the Committee may but need not provide for
payment to such Participant, either in cash or shares of Common
Stock, from time to time or at the time or times such shares shall
be issued or transferred to such Participant, of amounts not
exceeding the dividends which would have been payable to such
Participant in respect of such shares (as adjusted under Section
9) if such shares had been issued or transferred to such
Participant at the time such Award was granted.
(c) Any Stock Bonus Award, Performance Unit Award or Restricted Stock
Award may, in the discretion of the Committee, be settled in cash,
on each date on which shares
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<PAGE> 7
would otherwise have been delivered or become unrestricted, in an
amount equal to the Fair Market Value on such date of the shares
which would otherwise have been delivered or become unrestricted;
and the number of shares for which such cash payment is made shall
be added back to the maximum number of shares available for use
under the Plan, provided that the number of shares for which such
cash payment is made may be made subject to Stock Incentives for
Section 16 Persons only if the General Counsel determines that
doing so would not jeopardize any exemption from Section 16 of the
Exchange Act (including without limitation SEC Rule 16b-3) for
which the Company intends Section 16 Persons to qualify.
(d) Stock Bonus Awards, Performance Unit Awards and Restricted Stock
Awards shall be subject to such terms and conditions, including,
without limitation, restrictions on the sale or other disposition
of the shares issued or transferred pursuant to such Award, and
conditions calling for forfeiture of the Award or the shares
issued or transferred pursuant thereto in designated
circumstances, as the Committee shall determine; provided however,
that upon the issuance or transfer of shares to a Participant
pursuant to any such Award, the recipient shall, with respect to
such shares, be and become a shareholder of the Company fully
entitled to receive dividends, to vote and to exercise all other
rights of a shareholder except to the extent otherwise provided in
the Award. All or any portion of a Stock Bonus Award may but need
not be made in the form of a Performance Unit Award or a
Restricted Stock Award.
(e) Each Stock Bonus Award, Performance Unit Award and Restricted
Stock Award shall be evidenced by a written instrument in such
form as the Committee shall determine, signed by an officer of the
Company duly authorized to do so, provided that such instrument is
consistent with this Plan and incorporates it by reference.
(f) Director Stock Awards shall be granted as determined by the
Committee in accordance with the provisions of Section 7, and as
otherwise provided by this Plan.
6. OPTIONS.
Options shall be subject to the following provisions:
(a) Subject to the provisions of Section 9, the purchase price per
share shall be, in the case of an Incentive Stock Option, not less
than 100 percent of the Fair Market Value of a share of Common
Stock on the date the Incentive Stock Option is granted (or in the
case of any optionee who, at the time such Incentive Stock Option
is granted, owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of his or her
employer corporation or of its parent or subsidiary corporation,
not less than 110 percent of the Fair Market Value of a share of
Common Stock on the date the Incentive Stock Option is granted)
and, in the case of a Non-Statutory Stock Option, not less than
the par value (if any) of a share of Common Stock on the date the
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<PAGE> 8
Non-Statutory Stock Option is granted. A Non-Statutory Stock
Option may (but need not) entitle the Participant to purchase
shares of Common Stock at any fixed discount specified by the
Committee from Fair Market Value on the date of purchase. Subject
to the foregoing limitations, the purchase price per share may, if
the Committee so provides at the time of grant of an Option, be
indexed to the increase or decrease in an index specified by the
Committee.
(b) The purchase price of shares subject to an Option may be paid in
whole or in part (i) in cash, (ii) by bank-certified, cashier's or
personal check subject to collection, (iii) if so provided in the
Option and subject to such terms and conditions as the Committee
may impose, by delivering to the Company a properly executed
exercise notice together with a copy of irrevocable instructions
to a stockbroker to sell immediately some or all of the shares
acquired by exercise of the Option and to deliver promptly to the
Company an amount of sale proceeds (or, in lieu of or pending a
sale, loan proceeds) sufficient to pay the purchase price, or (iv)
if so provided in the Option and subject to such terms and
conditions as are specified in the Option, in shares of Common
Stock or other property surrendered to the Company. Property for
purposes of this paragraph shall include an obligation of the
Company unless prohibited by applicable law. Shares of Common
Stock thus surrendered shall be valued at their Fair Market Value
on the date of exercise. Any such other property thus surrendered
shall be valued at its fair market value on any reasonable basis
established or approved by the Committee. If so provided in the
Option and subject to such terms and conditions as are specified
in the Option, in lieu of the foregoing methods of payment, any
portion of the purchase price of the shares to be issued or
transferred may be paid by a promissory note secured by pledge of
the purchased shares in such form and containing such provisions
(which may but need not provide for interest and for payment of
the note at the election of the Participant in cash or in shares
of Common Stock or other property surrendered to the Company) as
the Committee may approve; provided that (A) if the Committee
permits any such note to be paid by surrender of shares of Common
Stock, such shares shall be valued at their Fair Market Value on
the date of such surrender, and (B) if the Committee permits any
such note to be paid by surrender of other property, such other
property shall be valued at its fair market value on any
reasonable basis established or approved by the Committee, and (C)
in the case of an Incentive Stock Option, any such note shall bear
interest at the minimum rate required to avoid imputation of
interest under federal income tax laws applicable at the time of
exercise and (D) any such note shall mature in ten years or such
lesser period as may be specified by the Committee.
(c) Options may be granted for such lawful consideration, including
money or other property, tangible or intangible, or labor or
services received or to be received by the Company, as the
Committee may determine when the Option is granted. Property for
purposes of the preceding sentence shall include an obligation of
the Company unless prohibited by applicable law. Subject to the
foregoing and the other provisions of this
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<PAGE> 9
Section 6, each Option may be exercisable in full at the time of
grant or may become exercisable in one or more installments, at
such time or times and subject to satisfaction of such terms and
conditions as the Committee may determine. The Committee may at
any time accelerate the date on which an Option becomes
exercisable, and no additional consideration need be received by
the Company in exchange for such acceleration. Unless otherwise
provided in the Option, an Option, to the extent it becomes
exercisable, may be exercised at any time in whole or in part
until the expiration or termination of the Option.
(d) Each Option shall be exercisable during the life of the optionee
only by him or her or his or her guardian or legal representative,
and after the death only by his or her Beneficiary or, absent a
Beneficiary, by his or her estate or by a person who acquired the
right to exercise the Option by will or the laws of decent and
distribution; provided that an Option of a Section 16 Person and
any Incentive Stock Option may be exercisable after death by a
Beneficiary only if such exercise would be, in the opinion of the
General Counsel, permissible under and consistent with SEC Rule
16b-3 or Section 422 of the Code, as the case may be. Each Option
shall expire at such time or times as the Committee may determine,
provided that notwithstanding any other provision of this Plan,
(i) no Option shall be exercisable after the tenth anniversary of
the date the Option was granted, and (ii) no Incentive Stock
Option which is granted to any optionee who, at the time such
Option is granted, owns stock possessing more than 10 percent of
the total combined voting power of all classes of stock of his or
her employer corporation or of its parent or subsidiary
corporation, shall be exercisable after the expiration of five (5)
years from the date such Option is granted. If an Option is
granted for a term of less than ten years, the Committee may, at
any time prior to the expiration of the Option, extend its term
for a period ending not later than on the tenth anniversary of the
date the Option was granted, and no additional consideration need
be received by the Company in exchange for such extension. The
Committee may but need not provide for an Option to be exercisable
after termination of employment until its fixed expiration date
(or until an earlier date or specified event occurs).
(e) An Option may, but need not, be an Incentive Stock Option. All
shares of Common Stock which may be made subject to Stock
Incentives under this Plan may be made subject to Incentive Stock
Options; provided that the aggregate Fair Market Value (determined
as of the time the Option is granted) of the stock with respect to
which Incentive Stock Options may be exercisable for the first
time by any Key Employee during any calendar year (under all
plans, including this Plan, of his or her employer corporation and
its parent and subsidiary corporations) shall not exceed $100,000
or such other amount as may apply under the Code.
(f) Each Option shall be evidenced by a written instrument, signed by
an officer of the Company duly authorized to do so, which shall
contain such terms and conditions, and
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<PAGE> 10
shall be in such form, as the Committee shall determine, provided
the instrument is consistent with this Plan and incorporates it by
reference. An Option, if so approved by the Committee, may include
terms, conditions, restrictions and limitations in addition to
those provided for in this Plan including, without limitation,
terms and conditions providing for the transfer or issuance of
shares, on exercise of an Option, which may be non-transferable
and forfeitable to the Company in designated circumstances.
(g) The Committee may specify, at the time of grant of an Incentive
Stock Option or, with respect to a Non-Statutory Stock Option, at
or after the time of grant, that a Participant shall be granted a
Non-Statutory Stock Option (a "Restored Option") if and when (i)
such Participant exercise all or part of an Option, including a
previously granted Restored Option, (an "Original Option") by
surrendering shares of Common Stock already owned by him or her in
full or partial payment of the Option price under such Original
Option and/or (ii) shares of Common Stock are surrendered or
withheld to satisfy tax obligations incident to the exercise of
such Original Option. All Restored Options shall be subject to the
availability of shares of Common Stock under the Plan at the time
of such exercise. A Restored Option shall cover a number of shares
of Common Stock not greater than the number of shares of Common
Stock surrendered in payment of the option price under such
Original Option and/or used to satisfy any tax obligation incident
to the exercise of such Original Option. Each Restored Option
shall have an option price equal to the Fair Market Value of the
Common Stock on the date of grant of the Restored Option and shall
expire on the stated expiration date of the Original Option. The
date of grant of a Restored Option shall be the date on which the
exercise of the Original Option or a previously granted Restored
Option resulted in the grant of such Restored Option. A Restored
Option shall be exercisable at any time and from time to time from
or after the date of grant of the Restored Option (or as the
Committee in its sole discretion shall otherwise specify in the
written instrument evidencing the Restored Option). The written
instrument evidencing a Restored Option shall contain such other
terms and conditions, which may include a restriction on the
transferability of the Common Stock received upon the exercise of
the Original Option or Restored Option, as the Committee in its
sole discretion may deem desirable.
(h) No Participant shall make any elective contribution or employee
contribution to the Plan (within the meaning of Treasury
Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4), during the balance
of the calendar year after the Participant's receipt of a hardship
distribution from a plan of the Company or a related party within
the provisions of Code Sections 414(b), (c), (m) or (o) containing
a cash or deferred arrangement under Section 401(k) of the Code,
or during the following calendar year. The preceding sentence
shall not apply if and to the extent that the General Counsel
determines it is not necessary to qualify any such plan as a cash
or deferred arrangement under Section 401(k) of the Code.
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<PAGE> 11
(i) No Option shall be exercisable unless and until the Company (i)
obtains the approval of all regulatory bodies whose approval the
General Counsel may deem necessary or desirable, and (ii) complies
with all legal requirements deemed applicable by the General
Counsel.
(j) An Option shall be considered exercised if and when written
notice, signed by the person exercising the Option and stating the
number of shares with respect to which the Option is being
exercised, is received by the Secretary on a properly completed
form approved for this purpose by the Committee, accompanied by
full payment of the Option exercise price in one or more of the
forms authorized by the Committee and described in Section 6(b)
above for the number of shares to be purchased. No Option may at
any time be exercised with respect to a fractional share.
7. DIRECTOR STOCK AWARDS.
(a) Each Non-Employee Director Participant shall receive such portion
of his Director Fees in Common Stock as shall be established from
time to time by the Board, with the remainder of such Director
Fees to be payable in cash or in Common Stock as elected by the
Non-Employee Director Participant in accordance with paragraph
7(b), below.
(b) Each Non-Employee Director Participant shall have an opportunity
to elect to have the remaining portion of his Director Fees paid
in cash or shares of Common Stock or a combination thereof. Except
for the initial election pursuant to the adoption of the Plan with
this Section 7 therein, or the Director's election to the Board,
any such election shall be made in writing and must be made at
least thirty (30) days before the beginning of the Plan Year in
which the services are to be rendered giving rise to such Director
Fees and may not be changed thereafter except by timely written
election as to Director Fees for services to be rendered in a
subsequent Plan Year. In the absence of such an election, such
remaining portion of the Director Fees of a Non-Employee Director
shall be paid entirely in cash. Nothing contained in this
paragraph 7(b) shall be interpreted in such a manner as would
disqualify the Plan for treatment as a "formula plan" under Rule
16b-3 pursuant to which the terms and conditions of each
transaction authorized by this Section 7 are fixed in advance by
the relevant terms and provisions thereof.
(c) The number of shares of Common Stock to be paid and distributed to
a Non-Employee Director under the provisions paragraphs 7(a) and
(b), above, shall be determined by dividing the dollar amount of
his Director Fees (which the Board has established, and/or such
Non-Employee Director has elected) to be paid in Common Stock on
any payment date by the Fair Market Value of a share of Common
Stock on that date. Except as may otherwise be directed by the
Committee, in its sole discretion, the payment and distribution of
such shares to a Non-Employee Director shall be on or within five
days after the date such Director Fees would otherwise have been
paid to him in cash.
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<PAGE> 12
8. CERTAIN CHANGE IN CONTROL, TERMINATION OF EMPLOYMENT AND DISABILITY
PROVISIONS.
Notwithstanding any provision of the Plan to the contrary, any Stock
Incentive which is outstanding but not yet exercisable, vested or payable
at the time of a Change in Control shall become exercisable, vested and
payable at that time; provided that if such Change in Control occurs less
than six months after the date on which such Stock Incentive was granted
and if the consideration for which such Stock Incentive was granted
consisted in whole or in part of future services, then such Stock
Incentive shall become exercisable, vested and payable at the time of such
Change in Control only if the Participant agrees in writing (if requested
to do so by the Committee in writing) to remain in the employ of the
Company or a Subsidiary at least through the date which is six months
after the date such Stock Incentive was granted with substantially the
same title, duties, authority, reporting relationships and compensation as
on the day immediately preceding the Change in Control. Any Option
affected by the preceding sentence shall remain exercisable until it
expires or terminates pursuant to its terms and conditions. Subject to the
foregoing provisions of this Section 8, the Committee may at any time, and
subject to such terms and conditions as it may impose:
(a) authorize the holder of an Option to exercise the Option following
the termination of the Participant's employment with the Company
and its Subsidiaries, or following the Participant disability,
whether or not the Option would otherwise be exercisable following
such event, provided that in no event may an Option be exercised
after the expiration of its term;
(b) grant Options which become exercisable only in the event of a
Change in Control;
(c) authorize a Stock Bonus Award, Performance Unit Award or
Restricted Stock Award to become non-forfeitable, fully earned and
payable upon or following (i) the termination of the Participant's
employment with the Company and its Subsidiaries, or (ii) the
Participant's disability, whether or not the Award would otherwise
become non-forfeitable, fully earned and payable upon or following
such event;
(d) grant Stock Bonus Awards, Performance Unit Awards and Restricted
Stock Awards which become non-forfeitable, fully earned and
payable only in the event of a Change in Control; and
(e) provide in advance or at the time of Change in Control for cash to
be paid in settlement of any Option, Stock Bonus Award,
Performance Unit Award or Restricted Stock Award in the event of a
Change in Control, either at the election of the Participant or at
the election of the Committee.
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<PAGE> 13
9. ADJUSTMENT PROVISIONS.
In the event that any recapitalization, or reclassification, split-up or
consolidation of shares of Common Stock shall be effected, or the
outstanding shares of Common Stock shall be, in connection with a merger
or consolidation of the Company or a sale by the Company of all or a part
of its assets, exchanged for a different number or class of shares of
stock or other securities or property of the Company or any other entity
or person, or a record date for determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in Common
Stock or other property (other than normal cash dividends) shall occur,
(a) the number and class of shares or other securities or property that
may be issued or transferred pursuant to Stock Incentives thereafter
granted or that may be optioned or awarded under the Plan to any
Participant, (b) the number and class of shares or other securities or
property that may be issued or transferred under outstanding Stock
Incentives, (c) the purchase price to be paid per share under outstanding
and future Stock Incentives, and (d) the price to be paid per share by the
Company or a Subsidiary for shares or other securities or property issued
or transferred pursuant to Stock Incentives which are subject to a right
of the Company or a Subsidiary to reacquire such shares or other
securities or property, shall in each case be equitably adjusted; provided
that with respect to Incentive Stock Options any such adjustments shall
comply with Sections 422 and 424 of the Code.
10. EFFECTIVE DATE AND DURATION OF PLAN.
The Plan shall be effective when it is first approved by the Board of
Directors, provided that the shareholders of the Company thereafter
approve it within one year of that date. If the Plan is not so approved by
shareholders, the Plan (and any Stock Incentive granted thereunder) shall
be null, void and of no force or effect. If so approved, the Plan shall
remain in effect, and Stock Incentives may be granted, until Stock
Incentives have been granted with respect to all shares authorized to be
issued or transferred hereunder or until the Plan is sooner terminated by
the Board of Directors, and shall continue in effect thereafter with
respect to any Stock Incentives outstanding at that time. In no event
shall an Incentive Stock Option be granted under the Plan more than ten
(10) years from the date the Plan is first adopted by the Board, or the
date the Plan is approved by the shareholders of the Company, whichever is
earlier.
11. ADMINISTRATION.
(a) The Plan shall be administered by a committee of the Board
consisting of two or more directors appointed from time to time by
the Board. No person shall be appointed to or shall serve as a
member of such committee unless at the time of such appointment
and service he or she shall be a "Non-Employee Director," as
defined in SEC Rule 16b-3. Unless the Board determines otherwise,
the Committee shall be comprised solely of "outside directors"
within the meaning of Section 162(m)(4)(C)(i) of the Code.
(b) The Committee may establish such rules and regulations, not
inconsistent with the
26
<PAGE> 14
provisions of the Plan, as it may deem necessary for the proper
administration of the Plan, and may amend or revoke any rule or
regulation so established. The Committee shall, subject to the
provisions of the Plan, have full power to interpret, administer
and construe the Plan and any instruments issued under the Plan
and full authority to make all determinations and decisions
thereunder including without limitation the authority to (i)
select the Participants in the Plan, (ii) determine when Stock
Incentives shall be granted, (iii) determine the number of shares
to be made subject to each Stock Incentive, (iv) determine the
type of Stock Incentive to grant, and (v) determine the terms and
conditions of each Stock Incentive, including the exercise price,
in the case of an Option, and (vi) approve any transaction
involving a Stock Incentive for a Section 16 Person (other than a
"Discretionary Transaction" as defined in SEC Rule 16b-3) so as to
exempt such transaction under SEC Rule 16b-3; provided, that any
transaction under the Plan involving a Section 16 Person also may
be approved by the Board of Directors, or may be approved or
ratified by the stockholders of the Company, in the manner that
exempts such transaction under SEC Rule 16b-3. The interpretation
by the Committee of the terms and provisions of the Plan and any
instrument issued thereunder, and its administration thereof, and
all action taken by the Committee, shall be final, binding, and
conclusive on the Company, its stockholders, Subsidiaries, all
Participants and employees, and upon their respective
Beneficiaries, successors and assigns, and upon all other persons
claiming under or through any of them.
(c) Members of the Board of Directors and members of the Committee
acting under this Plan shall be fully protected in relying in good
faith upon the advice of counsel and shall incur no liability
except for gross or willful misconduct in the performance of their
duties.
12. GENERAL PROVISIONS.
(a) Any provision of the Plan to the contrary notwithstanding, any
Stock Incentive issued under the Plan, including without
limitation any Option, shall not be transferable by the
Participant other than by will or the laws of descent and
distribution or to a Beneficiary designated by the Participant,
unless the instrument evidencing the Stock Incentive expressly so
provides (or is amended to so provide) and is approved by the
Committee; and any purported transfer of an Incentive Stock Option
to a Beneficiary, shall be effective only if such transfer is, in
the opinion of the General Counsel, permissible under and
consistent with SEC Rule 16b-3 or Section 422 of the Code, as the
case may be. Notwithstanding the foregoing, a Participant may
transfer any Stock Incentive granted under this Plan, other than
an Incentive Stock Option, to members of his or her immediate
family (defined as his or her children, grandchildren and spouse)
or to one or more trusts for the benefit of such immediate family
members or partnerships in which such immediate family members are
the only partners if (and only if) the instrument evidencing such
Stock Incentive expressly so provides (or is
27
<PAGE> 15
amended to so provide) and is approved by the Committee, and the
Participant does not receive any consideration for the transfer;
provided that any such transferred Stock Incentive shall continue
to be subject to the same terms and conditions that were
applicable to such Stock Incentive immediately prior to its
transfer (except that such transferred Stock Incentive shall not
be further transferable by the transferee inter vivos, except for
transfer back to the original Participant holder of the Stock
Incentive) and provided, further, that the foregoing provisions of
this sentence shall apply to Section 16 Persons only if the
General Counsel determines that doing so would not jeopardize any
exemption from Section 16 of the Exchange Act (including without
limitation SEC Rule 16b-3) for which the Company intends Section
16 Persons to qualify.
(b) Nothing in this Plan or in any instrument executed pursuant hereto
shall confer upon any person any right to continue in the
employment of the Company or a Subsidiary, or shall affect the
right of the Company or a Subsidiary to terminate the employment
of any person at any time with or without cause.
(c) No shares of Common Stock shall be issued or transferred pursuant
to a Stock Incentive unless and until all legal requirements
applicable to the issuance or transfer of such shares have, in the
opinion of the General Counsel, been satisfied. Any such issuance
or transfer shall be contingent upon the person acquiring the
shares giving the Company any assurances the General Counsel may
deem necessary or desirable to assure compliance with all
applicable legal requirements.
(d) No person (individually or as a member of a group) and no
Beneficiary or other person claiming under or through him, shall
have any right, title or interest in or to any shares of Common
Stock (i) issued or transferred to, or acquired by, a trust, (ii)
allocated, or (iii) reserved for the purposes of this Plan, or
subject to any Stock Incentive except as to such shares of Common
Stock, if any, as shall have been issued or transferred to him.
The Committee may (but need not) provide at any time or from time
to time (including without limitation upon or in contemplation of
a Change in Control) for a number of shares of Common Stock, equal
to the number of such shares subject to Stock Incentives then
outstanding, to be issued or transferred to, or acquired by, a
trust (including but not limited to a grantor trust) for the
purpose of satisfying the Company's obligations under such Stock
Incentives, and, unless prohibited by applicable law, such shares
held in trust shall be considered authorized and issued shares
with full dividend and voting rights, notwithstanding that the
Stock Incentives to which such shares relate shall not have been
exercised or may not be exercisable or vested at that time.
(e) The Company and its Subsidiaries may make such provisions as they
may deem appropriate for the withholding of any taxes which they
determine they are required to withhold in connection with any
Stock Incentive. Without limiting the foregoing,
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the Committee may, subject to such terms and conditions as it may
impose, permit or require any withholding tax obligation arising
in connection with the grant, exercise, vesting, distribution or
payment of any Stock Incentive to be satisfied in whole or in
part, with or without the consent of the Participant, by having
the Company withhold all or any part of the shares of Common Stock
that vest or would otherwise be distributed at such time. Any
shares so withheld shall be valued at their Fair Market Value on
the date of such withholding.
(f) Nothing in this Plan is intended to be a substitute for, or shall
preclude or limit the establishment or continuation of, any other
plan, practice or arrangement for the payment of compensation or
fringe benefits to directors, officers or employees generally, or
to any class or group of such persons, which the Company or any
Subsidiary now has or may hereafter lawfully put into effect,
including, without limitation, any incentive compensation,
retirement, pension, group insurance, stock purchase, stock bonus
or stock option plan.
(g) Any provision of the Plan to the contrary notwithstanding, except
to the extent that the Committee determines otherwise, (i)
transactions by and with respect to Section 16 Persons under the
Plan are intended to qualify for any applicable exemptions
provided by SEC Rule 16b-3, and (ii) transactions with respect to
persons whose remuneration would not be deductible by the Company
but for compliance with the provisions of Code Section
162(m)(4)(C) are intended to comply with the provisions of Code
Section 162(m)(4)(C). The Plan is also intended to give the
Committee the authority to award Stock Incentives that qualify as
performance-based compensation under Code Section 162(m)(4)(C) as
well as Stock Incentives that do not so qualify. Every provision
of the Plan shall be administered, interpreted and constructed to
carry out the foregoing intentions and any provision that cannot
be so administered, interpreted and construed shall to that extent
be disregarded.
(h) By accepting any benefits under the Plan, each Participant, and
each person claiming under or through him, shall be conclusively
deemed to have indicated his or her acceptance and ratification
of, and consent to, all provisions of the Plan and any action or
decision under the Plan by the Company, its agents and employees,
and the Board of Directors and the Committee.
(i) The validity, construction, interpretation and administration of
the Plan and of any determinations or decisions made thereunder,
and the rights of all persons having or claiming to have any
interest therein or thereunder, shall be governed by, and
determined exclusively in accordance with, the laws of the State
of Delaware, but without giving effect to the principles of
conflicts of laws thereof. Without limiting the generality of the
foregoing, the period within which any action arising under or in
connection with the Plan must be commenced, shall be governed by
the laws of the State of Delaware, without giving effect to the
principles of conflicts of laws thereof,
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irrespective of the place where the act or omission complained of
took place and of the residence of any party to such action and
irrespective of the place where the action may be brought.
(j) The use of the masculine gender shall also include within its
meaning the feminine. The use of the singular shall include within
its meaning the plural and vice versa.
13. AMENDMENT AND TERMINATION.
The Plan may be amended by the Board of Directors, without shareholder
approval, at any time and in any respect, unless shareholder approval of
the amendment in question is required under Oklahoma law, the Code
(including without limitation Code Section 422 and Proposed Treasury
Regulation Section 1.422A9(b)(iv) thereunder), any applicable exemption
from Section 16 of the Exchange Act (including without limitation SEC Rule
16b-3) for which the Company intends Section 16 Persons to qualify, any
national securities exchange or system on which the Stock is then listed
or reported, by any regulatory body having jurisdiction with respect to
the Plan, or under any other applicable laws, rules or regulations. The
Plan may also be terminated at any time by the Board of Directors. No
amendment or termination of this Plan shall adversely affect any Stock
Incentive granted prior to the date of such amendment or termination
without written consent of the Participant.
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